Credit (2)

Isla is applying for a loan to start her own business. The bank asks her to provide 'collateral'. What does 'collateral' refer to in this context?

• A type of loan

• Something valuable you promise if you can't pay

• A credit card feature

• A bank account

When Ava applied for a loan, the bank assessed her based on the 5 C's of credit. Which 'C' refers to Ava's reputation?

• Capacity

• Character

• Capital

• Conditions

Avery is trying to manage her finances better and comes across the 20/10 Rule. What is this rule used for in financial literacy?

• Calculating savings

• Calculating borrowing capacity

• Calculating investment returns

• Calculating tax deductions

Why might Ava use credit?

• To avoid paying taxes

• To purchase items she cannot afford immediately

• To increase her bank balance

• To receive free items

Lily is considering using a credit card for her purchases. What is an incorrect statement about credit?

• It is a form of borrowing

• It requires repayment

• It is a gift

• It allows for immediate purchase

Mia needs some money to buy a new laptop for her studies. She approaches a bank and they agree to give her the money, provided she pays it back with interest. What is this arrangement called?

• Money given without the need to pay back

• Money given from one party to another, agreeing that the money will be paid back with interest

• A gift of money

• A donation

Nora is considering getting a credit card. What is one way credit can benefit her as a grown-up?

• Earn rewards

• Avoid all responsibilities

• Get free vacations

• Never pay taxes

Zoe is considering using a credit card for her purchases. What is a benefit of using credit that relates to her future financial actions?

• Build a good reputation for future borrowing

• Avoid all future expenses

• Get free loans

• Never have to work

Isla's car broke down unexpectedly, and she needs to get it repaired immediately. What is a benefit of using credit in this urgent situation?

• Pay for emergencies

• Avoid urgent situations

• Create urgent situations

• Delay urgent situations

Priya is considering taking a loan to start her new business. The bank asks her to provide something as security to ensure the loan is repaid. What is this security called?

• A. A type of credit card

• B. Property or assets used as security for a loan

• C. A financial penalty for late payments

• D. A reward for timely payments